NEW YORK (CNN/Money) -
Maybe you need a car. Maybe you've found a car you really love. But whatever you do, don't compromise your financial health to buy it.

Financial planners often tell clients they have car loan payments that are too high given their incomes and goals. And clients often say, "Oh, but I got such a great deal."

Well, there seem to be lots of great deals in these incentive-soaked days.

But your best deal on a car is one you can truly afford. And that means keeping an eye on your budget while considering your monthly payment, the term of your loan, the interest rate and the total cost of owning the car over five years.

First, mind the monthly payment

The average consumer pays 11 percent of her monthly gross income on a car payment, according to estimates from autos Web site Edmunds.com.

PRUDENT RULE OF THUMB

Your monthly car payment shouldn't exceed 8% of your monthly gross income. Less if you have other debt.

Certified financial planner Chris Cooper thinks that's too high for most people. As a rule of thumb, he doesn't think it's prudent to pay more than 8 percent of your monthly gross income on a car payment. Less if you have other debt.

Here's why: When you buy a house, mortgage lenders ideally don't like to see more than 36 percent of your monthly gross income devoted to your total monthly debt payments; of that, they don't wantmore than 28 percent going toward housing. That leaves you with 8 percent for your car loan. Less if you have other debts.

So if you make $5,000 monthly -- that's $60,000 a year -- your car payment shouldn't exceed $400. If you have a $100 credit-card or student-loan payment every month, then your car payment shouldn't exceed $300.

Second, mind the term

Of course, you may be able to ratchet your payment-to-income ratio down to 8 percent by doing what a lot of car buyers do: take out a long-term loan.

According to the latest data from the Federal Reserve, as of May, the average loan term was just over 60 months (5 years), up from 52 months (4 years, 4 months) in 1998.

It used to be the 36-month loan was the most common. Then, in the mid-1990s, it was 60 months. Now, the majority of lenders will offer loans up to 72 months, said Nicholas Stanutz, head of the Consumer Banker Association's auto finance committee. That's six years of car payments. And a handful, he said, will even offer loans up to 84 months or -- hit the brakes, Bertha -- 96 months. That's right. An eight-year loan.

Meanwhile, Americans tend to change cars every three years or so, Stanutz said.

Realize the longer your loan term, the greater the chances that you'll be "upside down" -- which is to say you'll owe more on your car than it's worth by the time you're ready to sell it or trade it in.

Cooper's advice?

"Figure out the payment you can afford on a 36-month loan," he said.

Here's why: In the race between the declining value of your car and the amount of you still owe on it, you're likely to lose during the first three years of a long loan. The car will lose value faster than your monthly payments can pay down principal and interest. That's particularly the case if, like a lot of consumers, you've only made a 5 percent down payment on your car instead of the once-traditional 10 to 15 percent.

Those nice incentives -- rebates or zero-interest financing -- also accelerate depreciation. For a number of reasons, incentives can drive down the resale value of a car.

And even if you plan to keep the car a long time, life may dictate otherwise. What if you need a bigger car thanks to a new baby? Then you might be left with an upside-down trade-in.

"That's a bad position to be in," said Phil Reed, consumer advice editor for Edmunds.com. The best strategy, he said, is to pay off a loan in three years and drive your car for seven.

Third, mind the rate

If you're considering buying a car that's offering incentives -- say a 0-percent loan or cash back -- do the math. You actually may be better off paying for the car in cash, taking the cash-back incentive and then financing the car with a loan from a bank that offers a better interest rate than the standard dealer rate.

If you're buying a popular model that isn't offering incentives, shop around for the best interest rates before negotiating with the dealer.

The last thing you want is to agree to a loan because the monthly payments seem affordable, but the interest rate is higher than what you could get elsewhere.

You must consider the cost of ownership over five years to figure out what a car will really cost, Reed said.

TOTAL COST OF OWNERSHIPWhen you account for all the costs of owning a car over a 5-year period, you may find a higher priced car actually costs less.

Honda Civic LX

Hyundai Elantra GLS

Difference

Target Price

$16,155

$14,101

$2,054

Depreciation

$6,773

$8,475

-$1,702

Insurance

$6,220

$6,905

-$685

Maintenance

$1,001

$1,585

-$584

Fuel

$3,309

$3,823

-$514

Repairs

$552

$476

$76

Financing

$2,105

$1,837

$268

State fees

$347

$322

$25

Total 5-year cost

$20,307

$23,423

-$3,116

*Assumes a 15% down payment and a 60-month auto loan at 5.76%.

Source: Intellichoice

Remember, in addition to your monthly loan payments, you'll be paying for insurance, fuel, maintenance and repairs and you'll be absorbing the cost of depreciation.

That's why sometimes less-expensive cars can actually cost more over time than a car with a higher sticker price.

Compare, for instance, a Honda Civic LX four-door sedan, priced at $16,155, and the Hyundai Elantra GLS, priced at $14,101. Say you're making a 15 percent down payment and taking out a 60-month loan at 5.76 percent. According to automotive data provider Intellichoice, the Honda will cost $3,116 less to own after a five-year period than the Hyundai because it doesn't depreciate as quickly, and its insurance, fuel and maintenance costs are less.